What is clear is that tax cuts will not help much. ... It has been
surprising, then, to see President George W. Bush’s former economic advisers,
including Greg Mankiw, argue that tax cuts are the way forward. ...

Tax cuts have increased our national debt. They encouraged America to live
beyond its means, increasing our liabilities without commensurate increases in
assets. Further tax cuts would do the same. Good accounting looks at assets and
liabilities. Spending on infrastructure, education and technology create assets;
they increase future productivity.

Some of the spending in the stimulus serves multiple ends. Increased
unemployment benefits have the largest multiplier effects – cash-strapped
families spend every cent given – and meet vital social needs. It is imperative
to provide health insurance to the unemployed: without that, a single serious
incident can push a family into bankruptcy. Helping the unemployed meet house
payments reduces foreclosures, addressing one of the underlying causes of the
crisis. There are thus triple benefits.

We are in uncharted territory in this crisis. But household tax cuts, except
for possibly the poorest, should have no place in the stimulus. Nor should
business tax breaks, except when closely linked with additional investment. The
one tax cut that should be included is a temporary incremental investment tax
credit; it provides a big bang for the buck, encouraging companies to invest now
when the economy needs the spending. Increased investments in infrastructure,
education and technology, relief to states, and help to the unemployed need
pride of place.

This is a stimulus that some Republicans will find less attractive than
previous give-aways. But Americans voted for change they could believe in. I
trust that that is what we will get.

There's also a video, "Conversations on the Credit Crunch," at the
link above.

What is clear is that tax cuts will not help much. ... It has been
surprising, then, to see President George W. Bush’s former economic advisers,
including Greg Mankiw, argue that tax cuts are the way forward. ...

Tax cuts have increased our national debt. They encouraged America to live
beyond its means, increasing our liabilities without commensurate increases in
assets. Further tax cuts would do the same. Good accounting looks at assets and
liabilities. Spending on infrastructure, education and technology create assets;
they increase future productivity.

Some of the spending in the stimulus serves multiple ends. Increased
unemployment benefits have the largest multiplier effects – cash-strapped
families spend every cent given – and meet vital social needs. It is imperative
to provide health insurance to the unemployed: without that, a single serious
incident can push a family into bankruptcy. Helping the unemployed meet house
payments reduces foreclosures, addressing one of the underlying causes of the
crisis. There are thus triple benefits.

We are in uncharted territory in this crisis. But household tax cuts, except
for possibly the poorest, should have no place in the stimulus. Nor should
business tax breaks, except when closely linked with additional investment. The
one tax cut that should be included is a temporary incremental investment tax
credit; it provides a big bang for the buck, encouraging companies to invest now
when the economy needs the spending. Increased investments in infrastructure,
education and technology, relief to states, and help to the unemployed need
pride of place.

This is a stimulus that some Republicans will find less attractive than
previous give-aways. But Americans voted for change they could believe in. I
trust that that is what we will get.

There's also a video, "Conversations on the Credit Crunch," at the
link above.